Asset manager London & Capital has announced that its German Real Estate Fund has acquired a retail warehouse in Heppenheim, near Frankfurt, for €29.3 million.
This latest acquisition for the Fund entails an initial yield of 6.50%. The multi-let deal will generate an annual rental income of €2.13 million from three high-quality retailers: Praktiker, a home improvement chain with 340 stores in eight countries, Media Markt, Europe's largest consumer electronics retailer, and stationery multinational Pitney Bowes. The anchor tenant has a lease of 14 years reflecting the German Real Estate Fund's commitment to holding properties with long leases.
Iain Keys, Director of Real Estate at London & Capital, reflects on this latest purchase: "We target properties with high quality tenants and long leases and the Heppenheim deal represented an excellent buying opportunity, true to our principles of investment. By maintaining these highly selective search criteria, the outlook is for a continued generation of positive returns for investors in our German Real Estate Fund against a backdrop of yield compression in Germany."
The German Real Estate Master Fund returned 9% in the six months to the end of February and the Heppenheim purchase takes the Fund size up to €268 million.
Source: London & Capital